The total value of
outsourcing contracts in the first quarter of this year dropped
by 44% compared to the same period a year ago despite a
growth in the number of deals.
According to the latest research carried out by sourcing
consultancy TPI the first three months of 2009 saw Euros7bn worth
of outsourcing contracts signed in the EMEA region.
This represents a 14% fall from the previous quarter and a
massive 44% drop from a year ago, as companies cut costs by signing
smaller outsourcing contracts.
The research found that although the number of outsourcing
contracts has grown quarter on quarter, the average contract value
fell 29% from Euros148m to Euros105m.
"We are seeing a growing tendency for companies to award more
outsourcing contracts, though of smaller value," said Duncan
Aitchison, president, TPI EMEA. "This is primarily the result of
tactical initiatives meant to address a specific challenge,
typically around cost reduction."
He said contract values will increase when the economy
recovers.
A total of 141 contracts valued at €15.4bn were signed globally,
with 68 in Europe the Middle East and Africa.